To ensure continued competitiveness, each business must focus on constantly improving logistics and supply chain processes. Metrics and key performance indicators (KPIs) might assist you understand what needs to be done. The former are considered to be the measures that allow for the monitoring and evaluation of all business elements, whilst the latter are a subset of metrics that allow for the measurement of precise, very significant business features. Companies use these quantitative criteria differently depending on their performance priorities. The results acquired from the different metrics and KPIs allow the improvement of outcomes besides an alignment of all people and processes with the set objectives.
Several benefits can be realized by using these two performance measurement tools. Firstly, a company manages to measure its targets. They help to assess how far the organization is to achieve its aims. By understanding the progress that has been reached and the different reasons for failing to accomplish the goals, management can promptly act and come up with strategies that fasten the accomplishment of goals (Bhimani & Langfield-Smith, 2007). Secondly, they create a climate for learning. The information that is acquired from the use of metrics and KPIs is usually instrumental in bringing about meaningful conversations at the workplace. In so doing, learning can be fostered by instructing others on ways of doing things differently to ensure better performance.
Thirdly, accountability is usually encouraged. Vital statistics concerning performance are typically revealed, which would have otherwise remained concealed thus leading to incorrect decisions being made. Poor performing sectors have to be answerable to why their statistics paint an unfavorable picture of their performance (Bhimani & Langfield-Smith, 2007). Fourthly, the acquisition of crucial information is usually made possible. By availing a prompt image of the company’s overall performance, manage can act quickly besides facilitating better chances of staying highly competitive. Accessing real-time data is essential in enabling systematic adjustments when necessary.
Metrics Used by Wal-Mart
October 2016 saw Wal-Mart introducing a Sustainable Packaging Playbook, which is a compilation of the best practices acquired over the years. This step was undertaken to create an alignment between the suppliers and the organizational goals. The aspect that was affected was that of plastics packaging. The businesses that are making progress towards its changes usually get high scores. Consequently, the playbook avails sufficient information on the way to design sustainable packaging. Suppliers get to convey the essential steps they are undertaking in the push for sustainability (refer to Appendix A). The retailer is also dedicated to purchasing at least seventy percent of the offerings it and its subsidiaries sell in the US from compliant suppliers. After the review of the surveys filled out by the suppliers, Wal-Mart then gives an award those that make substantial progress, which will be done every year.
There are three main recommendations that are made in the playbook. The first one is that of augmenting design, which obliges suppliers to deliberate if the packaging sufficiently safeguards the product in addition to checking if all the materials utilized to make the packaging are vital or if they can be replaced or omitted (Vincenti, 2017). There is also a suggestion that all packaging that is unnecessary should be done away with. Secondly, there is the sourcing of sustainability. Wal-Mart encourages its suppliers to guarantee that anything used to create the packaging should be sourced in an environmental and socially responsible way. The material’s health should also be promoted by ensuring that priority chemicals are eradicated, diminished, or banned.
The last recommendation is that of backing the recycling movement. Wal-Mart’s suppliers are encouraged to see if the package to be used is made with materials that enable recycling (Vincenti, 2017). For instance, the organization discourages having biodegradable additives in plastics that are petroleum-based owing to the likely contamination of recycling streams. Also, if the containers have any labels, the latter should not inhibit recycling practices. Additionally, closures and the parent package ought to be manufactured from the same material, if possible, or there should be an assurance that the closures can be easily detached. Moreover, it is crucial that there be clear communication on how a packaging product should be recycled to guarantee that every buyer is aware of what to do with the packaging upon making the purchase (Vincenti, 2017). All these metrics will enable the company to improve its index score on sustainability in addition to diminishing the cost of goods.
Wal-Mart could also develop KPIs that identify its suppliers’ ethical performance during the surveys. Firstly, activities KPIs could question the actions they are undertaking to augment their compliance and ethics performance. Secondly, process KPIs could reveal these stakeholders' reliability concerning their compliance. Thirdly, outcome KPIs could answer if the suppliers’ undertakings are yielding better results. Lastly, customer KPIs can reveal any complaints of non-compliance to ethical performance principles. Depicting a high ethical conduct can be essential in the company’s business cycle. It would significantly appeal to consumers thus having a boost in sales and returns (Crane & Matten, 2016). Employees would also want to stay with the organization, and a reduced turnover translates to amplified productivity (Crane & Matten, 2016). Investors would also be attracted to the company thus reducing the risks of a takeover.
References
Bhimani, A., & Langfield-Smith, K. (2007). Structure, formality and the importance of financial and non-financial information in strategy development and implementation. Management Accounting Research, 18(1), 3-31.
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
Vincenti, A. (2017, February 21). Walmart’s New Sustainable Packaging Playbook. Retrieved October 11, 2017, from https://www.linkedin.com/pulse/walmarts-new-sustainable-packaging-playbook-alfonso-vincenti
Appendix A: Priorities Survey Given to the Suppliers
Category
Evaluation Component
Possible Score
(from 1 to 10)
Design Optimization
Protect the product
Reduction of materials
Source Sustainability
Maximization of renewable materials
Enhancement of material health
Backing Recycling
Designed to allow recycling
Communication about its recyclability
